But many current accounts offer rates that compare favourably with savings accounts, as well as offering cash-back deals.

Saving reforms

Although Isas currently have tax advantages, f rom April 6 many people saving up for a holiday - or anything else - will have a new personal savings allowance that will mean they no longer have to pay tax on the interest they get from other accounts.

People paying tax at the basic 20% rate will be able to earn as much as £1,000 in interest on their savings without having to pay tax on it.

Higher rate taxpayers paying 40%, meanwhile, will be able to claim up to £500 tax-free. Those paying the additional 45% tax rate will not be entitled to a personal savings allowance, however.